Business is NOT war, but …

Andrew Bass’s Pragmatics Newsletter

Practical techniques and thought-provoking ideas

This issue takes under 4 minutes to read.

Business is not war, but here are some lessons from history for difficult times

This is not the last recession: A classic mistake in military strategy is to prepare to fight the last war rather than the next one, and the classic example is the Maginot line that the French built between the First and Second World Wars. This line of fortifications along their eastern border assumed that fixed trench warfare would continue to be standard procedure, and it left the French badly misfooted and unable to manouevre when faced with the unprecendented conditions created by the Blitzkrieg.

Don’t pull your head in: French high command at the start of WW2 was holed up in the Château de Vincennes, with very poor communication with the front. In fact, it was described by one observer as like a ‘submarine without a periscope’. See this newsletter for more on the dangers of detached senior management.

Self-fulfilling prophecies have a tendency of coming true: In private, Churchill was extremely doubtful about British chances in the early part of the war. In public of course, he projected his legendary determination, and who can doubt it was a galvanising contribution to ultmate success?

Resist the temptation to spin. Note that while Churchill was positive, he was also honest. “I have nothing to offer but blood, toil, tears and sweat” is not an appealing sales pitch, but it is straight, and therefore retains credibility. Employees and customers can see through spin, and all it does is weakens confidence. Imagine a bank saying “there will be no credit losses on our massive portfolio of asset backed securities, because it is of such high quality”. Is there a surer way to trigger an immediate sell-off of the bank’s shares?

As Corporal Jones from Dad’s Army would say: “Don’t panic!”. One example of panic is to make across-the-board cuts regardless of difference in performance across the business, or regardless of the hard-to-recover skills and assets that are being discarded. I’ve been impressed by those of my clients who are taking an intelligent approach to redeploying resources – for example, being flexible in moving them from areas where they can’t make money to areas where they can, often counter-cyclical ones which currently offer good opportunities.

Allies make a big difference: Get to know your customers better. Do they have new needs you could address? Can you help them to cope? Can you spend more time now on those “important but not urgent” relationship-building activities? Can you form alliances with people who are in counter-cyclical businesses and as a consequence have capacity problems?

Finally, in the words of one of my favourite strategists, Col. John Boyd:

“People, Ideas, Hardware – in that order.” The most tooled-up army doesn’t always win, and the biggest marketing budget doesn’t always carry the day. Consider that restricted access to capital and other resources can be the mother of invention. I always like the image of Barnes-Wallis developing the idea for the bouncing bomb in his bird pond. In modern business terms: “Talent/Relationships, Viable Strategy, Systems/Processes” – in that order.

Copyright 2008 Andrew Bass. All rights reserved. Permission granted to excerpt or reprint as long as you include attribution.
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Copyright 2008 Andrew Bass. All rights reserved. Permission granted to excerpt or reprint as long as you include attribution.